Hog & Corn Comments – 04/19/11 Weather’s in the drivers seat

Corn – July ’11 corn is looking for some direction and higher looks like the direction it wants to move. I don’t think we are going to see fireworks to the upside just yet but if the weather stays cool and wet and prevents planting of the much needed corn acres we could see the market add more premium to the old crop. Corn is only 7% planted and it sounds like we won’t get much accomplished this week either.

I’m of the opinion corn is going to work its way higher or at minimum be supported until planting progress reaches 50-75% complete. By then the trade should begin to assume the crop is going to get planted okay. Then we move on to growing conditions and weather (still). It is going to be a rocky road this summer so try to use known risk strategies to protect feed needs!

Bottom Line – I’m looking for an early low and late high tomorrow.

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Meal – July ’11 meal is searching for a bottom and as we hold support just above the $343.00 area. I’m looking for a sideway’s market for a bit with a slight tilt to the upside. Right now the challenge to the upside would be to get above $356.30 and close there otherwise we should stay sideway’s.

Bottom Line – I’m looking for an early low tomorrow.

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Hogs – June ’11 hogs had a good day as we managed to close higher with our strength coming in and after the pit close of 1:00 p.m. central. The June hogs need to get above $102.45 and hold it as support then we can look to $103.00 and ultimately our contract high of $104.35. I’m of the opinion that the futures market wants to move higher from here but the cash market is lagging. The basis levels are outrageous! Either cash needs to climb or May futures are waaaay too rich.

My opinion is that cash should continue to firm over the coming weeks. This week is the exception because of the shortened week due to Easter. The June ’11 contract is making a wedging pattern which suggests a significant breakout in one direction or the other. To me the breakout looks to be favoring the upside if we get one but it is a signal that the market should make a big move soon.

Bottom Line – I’m looking for an early low in the June ’11 hog contract for tomorrow.

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